U.S. stocks were higher Monday as investors snapped up technology and communications shares and weighed the prospect of further sanctions on Russia over the war in Ukraine.
The S&P 500 index edged higher after posting a third straight week of gains on Friday, even as evidence of potential war crimes by Russia over the weekend prompted the European Union and U.S. to push for new penalties.
- The Dow Jones Industrial Average DJIA,
+0.24%was up 83 points, or 0.2%, near 34,902.
- The S&P 500 SPX,
+0.70%was up 30 points, or 0.7%, at 4,575.
- The Nasdaq Composite COMP,
+1.75%rose 237 points, or 1.7%, to trade at 14,499.
On Friday, the Dow logged a 0.1% weekly fall, after back-to-back weekly gains. The S&P 500 eked out a 0.1% gain for the week, while the Nasdaq Composite advanced 0.7%, with both logging their third straight weekly gain.
What’s driving the market
Stocks were trading near session highs Monday afternoon, with investors piling into shares of technology and communications companies after Elon Musk disclosed a large stake in social media platform Twitter Inc.
The S&P 500’s information technology sector was up 1.6% in afternoon trade, while the communications services component was up roughly 2.2% and the consumer discretionary sector was advancing by 2.1%, according to FactSet.
“Technology is primarily up because of Musk buying shares of Twitter,” said Kent Engelke, chief economic strategist at Capitol Securities Management, by phone. “But we’ve also talked about the lack of liquidity in markets right now, whether it’s equities or Treasurys.”
Engelke expects the next big catalyst for stocks to come in about a week with the kickoff of quarterly earnings in earnest by big banks and investors looking for more clarity on the impact of hot inflation on margins.
The Federal Reserve also remains a key focus, with minutes from the central bank’s March policy meeting due on Wednesday. The minutes will be parsed for clues to policy makers’ plans for future moves — in particular, the anticipated reduction of the Fed’s nearly $9 trillion balance sheet — after a quarter-point rate hike was delivered last month.
Investors, economists and analysts continue to debate the implications of moves along the Treasury yield curve. The yield on the 2-year Treasury note traded above the 10-year rate again on Monday — inverting that closely watched measure of the curve, which has served as a reliable recession indicator, albeit with median lag of around a year-and-a-half.
“This is a tricky environment for equities. The bond market is saying the risk of an ‘accident’ is very high as rising rates could break a financial system that’s swimming in leverage, but on the other hand, the economy is booming and real yields are still negative,” wrote Marios Hadjikyriacos, senior investment analyst at XM, in a note.
That leaves equity investors with little choice but to “hold on,” the analyst said.
“With bonds selling off and commodities at the mercy of geopolitics, there just aren’t many attractive investment opportunities outside of the stock market. That sets the stage for some choppy trading, until it becomes clearer whether a recession is really on the cards,” he said.
Companies in focus
- In corporate news, shares of Twitter TWTR jumped 29% after a regulatory filing showed that Tesla Inc. TSLA boss and world’s richest man Elon Musk had acquired a 9.2% stake in the social-media platform.
- Starbucks Corp. SBUX,
-4.30%said on Monday that it would suspend its stock-repurchase program, effectively immediately, as Howard Schultz returns to the company as chief executive. Shares fell 4.6%.
What other assets are doing
- The yield on the 10-year Treasury note TMUBMUSD10Y,
2.416%rose 3 basis points to 2.405%. Yields and debt prices move opposite each other.
- The ICE U.S. Dollar Index DXY,
+0.36%, a measure of the currency against a basket of six major rivals, was up 0.4%.
- Bitcoin BTCUSD,
-1.53%fell 2.4% to trade near $45,290.
- Gold futures GC00,
+0.63%ended higher, with the June gold contract GCM22, +0.63%rising $10.30, or 0.5%, to settle at $1,934 an ounce.
- The Stoxx Europe 600 SXXP,
+0.84%closed up by 0.8%, while London’s FTSE 100 UKX, +0.28%advanced 0.3%.
- The Hang Seng Index HSI,
+2.10%finished 2.1% higher in Hong Kong, while Japan’s Nikkei 225 NIK, +0.25%edged up 0.3%.
— Joy Wiltermuth contributed to this article.